Lionsgate posted soft quarterly earnings with revenue of $745 million down 20% from $938 million the year earlier and below Wall Street expectations.
The motion picture producer and distributor, which just announced it’s laying off 15% of its global motion pictures group, said it swung to a net loss of $18.4 million from a $1.8 million profit the year before.
OTT subscribers — a major focus — rose by 2.3 million to end the quarter at 13.7 million.
Motion picture revenues fell to $257 million from $405 million due to theatre closings associated with the global pandemic, partially offset by the performance of titles in the premium video-on-demand market and digital home entertainment. Segment profit, however, surged 63% to $83 million on strong demand for library content and lower distribution and marketing costs.
The layoffs were a nod in part to the economics of the pandemic and to an industry-wide streamlining at entertainment companies across the grid to optimize production and distribution in a digital age.
Television production sales fell to $197.2 million from $274 million in the prior year quarter, and segment profit of $9.9 million was down from $12.6 million on the timing of production schedules and episodic deliveries.
Media networks segment revenue of $388 million firmed 3.8% from the prior year on profit of $93 million, down from $104 million. Revenues were driven by strong growth in domestic OTT subscribers and increased revenue from STARZPLAY International.
On its last earnings call in August, management described progress on transitioning the business for a greater focus on streaming. At a media conference in September, Starz CEO Jeffrey Hirsch discussed the rapid growth of the app even as cord-cutting accelerates the erosion of linear pay TV profits across the board.
Lionsgate, which is operating in a landscape of media giants and carries a hefty debt load, saw its stock sink this year, with a dip in October as COVID cases spiked. It’s perked up so far this month and was up more than 2% today, a strong day for showbiz stocks.
The company has a library of some 17,000 film and titles and television programs. The library brought in $166.7 million in revenue in the quarter, the company said.
Management will discuss earnings on a conference call set for 5 pm ET today.